(Note, 2016. This was written before recent fast-paced changes in the U.S. medical system. Nonetheless it has valid points and good comment discussion so we’ll let it stand with a few small revisions. Main point is beware “accident” insurance, it’s often way better looking on paper than in actual use.)
Accident insurance in the United States of America is as much a black water swamp as any other category of health insurance. Attractive (sometimes) websites and carefully worded PR copy make you think you’ve found the Valhalla of covering your backcountry skiing behind, but read the fine print before you dump your piggy bank. Oh, and what’s NOT in the fine print will chomp your wallet as well. (See Part 1, Rescue Insurance.)
Due to their advertising, Aflac is well known for accident insurance. Like any insurance company you’ll spend hours figuring out if they’ll provide anything useful in return for your coin. You can download a PDF “brochure” on their website, then after thinking you’re getting an idea of what they offer you’ll notice text that reads: “Refer to the policy and rider for COMPLETE DEFINITIONS, details, limitations, and exclusions.” So what you’ve just read is mere PR copy. Shucks.
After research worthy of a Bible scholar, we determined that Aflac does cover skiing, but we were never clear about their coverage of what they call a “hazardous Activity Accident.” For example, the agent we spoke with couldn’t tell us if “mountain climbing” applied to doing a hike-up peak, or was defined by the use of ropes, or what. That kind of vagueness is a red flag warning when it comes to insurance because when you do make a claim you’ll likely encounter a skyscraper full of individuals who’s job it is to figure out ways to deny paying you. Thus, let’s say you’re out hiking up a mountain one day and lightning takes you out. Aflac will pay their death benefit to your loved ones? Will it pay if you survive and end up with fourteen different injuries? Unknown.
People who like Aflac say it pays quickly, and making a claim is easy (at least when they do cover you).
Indeed, unlike Aflac, other types of supplemental insurance may require you to first apply for coverage with your “primary” insurance, usually your main health insurance policy. Once you receive an “Explanation of Benefits” (EOB) from your primary, you send it along with your application for payment to your supplemental insurance. The process can be confusing and time consuming — especially if you’re incapacitated and have limited help.
(What is more, Aflac and all other accident insurance always require a physician to fill out some part or portion of the claim form. So you’ll go through a process of mailing or hand delivering the claim form to the doctor, getting it filled out, then retrieving it. Again, it’s a hidden cost in terms of time and effort.)
Despite the (relative) simplicity of how they pay, the problem with Aflac accident insurance is despite what we determined were significant monthly payments, the benefits were so meager compared to common medical care costs as to be a Las Vegas lounge joke. For example, the emergency room benefit is $120 and the MRI/CAT benefit is $200 per year. It’s been my experience that when you end up in a hospital emergency room, they’ll stick you in the MRI and the CAT at the slightest indication, and might even throw in a quick x-ray just to be sure they didn’t miss anything. That $200 will buy one of the MRI tech’s shoe covers. The other $3,000 for the procedures will be up to you and your insurance deductible, not Aflac.
In other words, Aflac is not really “gap” insurance that helps make up for a huge health insurance deductible. Instead, it is a pricey way to receive a bit of cash if you get hurt. Instead, “real” accident insurance might be a better option if you’re taking care to cover yourself financially.
“Real” medical accident insurance
One choice is the insurance offered through the American Alpine Club, associated with Adventure Advocates, selling accident insurance underwritten by United States Fire Insurance Company.
At least you know their insurance covers climbing! More, the “Plus Plan” covers skiing/snowboarding as well as helicopter rescue. What you’d want is the “Gold” version of the “Plus Plan” as it is the only level with a useful payout per accident of $10,000 ($50,000 for permanent consequences such as dismemberment). Still low, but if viewed as “gap” insurance to work with your health plan, those are useful sums. But wait, sit on a snowmobile and you’re not covered. Likewise, better make sure you’re a “fare paying passenger” in any aircraft, or you’re not covered.
More, the cost of AAC/Adventure-Advocates accident insurance is significant. Try $268 a month, or $3,216 a year for your family. If we applied that $268 a month to our Blue Cross bottomless cash hole, we could possibly drop our deductible down to where we could self insure for the “gap” by simply placing some of what we’d spend on accident insurance into savings.
Another option for accident insurance that covers backcountry skiing is American General Life’s accident policy. This is the accident insurance we ended up with, primarily because it doesn’t exclude mountain sports or snowmobiling (though parachuting is not covered). Maximum benefit per insured per year is $15,000. Again not huge, but significant if you have high-deductible “major medical” health insurance. Cost for our family of three is $358.35 a year. Sound affordable? Yes, with huge caveats.
First, American General really is supplemental insurance. It only covers your initial treatment (has to be obtained within 72 hours of incident), plus a limited amount of “three follow-up visits” per accident. All visits to occur within 30 days of the accident. Maximum benefit per person per year is $15,000.
The policy declaration is more confusing than a used car salesman about what they mean by “follow-up.” For example, say you broke your femur and ended up in the emergency room, then needed a $200,000 open reduction surgery. Would the operation be a “follow-up” visit? We got our medical billing consultant to research this as we didn’t even know how to ask the question.
Consultant determined that yes, a surgery would count as a follow-up and obviously take you up to the maximum benefit (after which, hopefully your major medical policy would kick in.) BUT, the surgery would have to happen within 30 days of the accident and would count as one of your “three followup visits.” Also, it has to be outpatient!
In other words, you’d have to be careful not to use up your “follow-up” visits with doctor’s office visits while you’re trying to determine your course of treatment — and if you do need surgery, better not spend a night in the hospital! If that game sounds a bit ridiculous, rest assured it indeed is somewhat strange (and appears to be a disguised way for this policy to not pay out for major surgery).
In the heat of a severe injury, while you’re trying to juggle family life, job, and healing, you’re trying to remember you can only see the doctor a total of four times on your accident policy? Perhaps American General should pay to have their fine-print tattooed on the back of your hands, or perhaps imprinted on your spouse’s forehead so when they’re visiting you in the hospital you can review the details before you kiss.
(Also in the fine print of your accident insurance: Do they cover prescription drugs? Chiropractic? Probably not.)
Another problem with American General (and probably any accident insurance) is that the claims process is complicated and time consuming. For example, they’ll want a “Completed Accident and Health Insurance Claims form.” Easier said than done. This form has to be completed by the “attending physician,” meaning you’ll have to bring it to where you received care and get it filled out. Adding to the process, if you have primary health insurance that claim has to be made first, then the “explanation of benefits” (EOB) forms you receive from your primary have to be sent along with the American General claim. If you’re trying to hold a job as well as heal, add all the paperwork and you’ll feel like you’re rebuilding a NASCAR engine with nothing more than a pocket knife.
Moreover, say you get hurt in Nepal and the doctor that treats you doesn’t even speak English, let alone file insurance claims for you. That means when you get home, before collecting from your supplemental accident insurance you’ll have to somehow create or obtain the proper forms from the Nepalese doctor, which you will then have to file yourself with your primary health insurance company. Only when you get the EOB form back from your primary will you be able to apply to the supplemental. Time for that medical billing consultant we mentioned in Part 1? You bet. Learning to speak Nepalese might be a good idea as well, along with being sure your phone is enabled for international dialing.
In the end, while accident insurance looks good on the surface we’d recommend taking care with what you end up paying for. It’s almost certain that it looks better on paper than it performs in real life.
Commenters, please let everyone know your experiences with accident insurance. Above is base on my limited experience — am always willing to learn more.